Hundreds of workers for Pueblo Steel Mill expansion let go amid ongoing lawsuit

PUEBLO, Colo. (KRDO) -- Amid ongoing litigation between a subsidiary of EVRAZ North America, owners of the Pueblo Steel Mill, and Wanzek Construction Inc., the company hired on to build the state-of-the-art solar-powered steel mill expansion, 660 workers are now out of a job working in Pueblo.

Workers employed by Wanzek told 13 Investigates a meeting was held Tuesday morning between leadership and the hundreds of contracted workers. In that meeting, they were informed they would be relieved from their duties effective immediately.

The federal lawsuit claims Wanzek Construction didn’t complete contractually required work, failed to hire adequate workers, didn’t meet the required work completion schedule, failed to observe safety procedures and protocols, and caused property damage and endangered personnel. 

Additionally, the suit alleges that Wanzek Construction made it impossible to meet deadlines, and delays are resulting in substantial costs and damages to EVRAZ North America's subsidiary.

Now, EVRAZ NA says they are in a transition period. In a statement, Senior Vice President David Ferryman said:

"EVRAZ North America is in the process of transitioning to a new General Contractor to complete construction on the new rail mill. Construction will continue with a new General Contractor in place to ensure the overall safety, quality, and timeliness of the project. The work is not going away, and no EVRAZ NA employees are being let go as a result of this change. We look forward to retaining many of the project’s current subcontractors as we work to complete the project.

We’re confident that these changes will help us to successfully complete the rail mill project, allowing us to best serve our workforce, our customers, and the Pueblo, CO community for many years to come.  EVRAZ North America is committed to the growth, longevity, and ongoing success of our operations in Pueblo." -- David Ferryman

Back in July, 2021 the steel mill expansion in Pueblo was likened as a major boost for the Pueblo economy. The anticipation of nearly 1,000 people residing and spending money in the Steel City was felt from city and state leaders.

"This expansion will create 800 jobs, good jobs in the Pueblo community and laying the ground work for years of prosperity," Gov. Jared Polis said at the groundbreaking ceremony on July 14, 2021.

"For more than a century, hard working Puebloans have supported their families in this community by working at this mill, and this expansion will continue that opportunity for the foreseeable future," Pueblo Mayor Nick Gradisar said at the groundbreaking ceremony.

In early 2023, just months from when the expansion was scheduled to be completed, Gradisar said there is reason for optimism. In a statement, Mayor Gradisar said:

"Although it is unfortunate Evraz needed to make a change in general contractors on their construction project, I have full confidence this will be a short-term disruption to the future of the rail mill. Based on conversations over the holiday with Evraz officers I believe Evraz is committed to supporting the local economy and jobs of those who are able to contribute to the completion of the construction project. It is not uncommon for a project of this magnitude to see disruptions, but I know Evraz is committed to completing this project in a timely manner as close to the original schedule as possible." -- Pueblo Mayor Nick Gradisar

13 Investigates asked Wanzek how many impacted employees were from Pueblo and how many were out of state workers. They could not immediately provide those numbers to us.

They issued this statement late Tuesday night:

"Wanzek is proud of the work that we have done in constructing a world-class facility with a best-in-class safety record. We are disappointed in the decision by Palmer North America/EVRAZ North America to terminate our contract to construct the rail mill. We believe this decision was wrongful, as the problems on the project stemmed from delays in the Owner/Palmer failing to deliver the design. At this time, we remain focused on minimizing the impact to the 660 Wanzek employees that we were forced to lay off." -- Wanzak Spokesperson